Inventory control systems: theory and practice

The paper reviews the general methodology for the design of inventory control systems as advocated in typical operations management textbooks. Surprisingly, some of the broad directives are quite confusing and the underlying logic of these directives is inconsistent. Several published cases are analysed to try and clarify the current situation. The exercise reveals the source of the problem. By and large, stock control theory focuses on the activities of the purchasing company. Therefore, it glosses over the potential impact of different ordering policies upon the warehouse and transport operations taking place at the suppliers' end. These twin activities benefit from stable resource(s) planning, which are linked to regular delivery schedules along predetermined vehicle routes. However, much depends on the strength of the relevant customer-supplier relationship.